Value matters or values matter? An analysis of heterogeneity in preferences for sustainable investments

Pension fund investments have substantial influence on sustainability. We analyze preferences for sustainable investment among a representative cross-section of 2,486
pension fund participants in the Netherlands, through a questionnaire survey fielded in the LISS panel. In contrast to standard investment theory, we find that sustainable
investments are commonly favored, even if they harm financial interests. To explain variation among participants’ preferences for sustainable investments, we test  sociodemographic factors suggested by dominant neoclassical investment and behavioral finance theories. Moreover, we add to the existing literature by developing an
alternative cultural-theoretical explanation that stresses the role of value orientations. We estimate linear and generalized ordered logit regression models, and find little
support for neoclassical and behavioral finance theories, but substantial support for the importance of value orientations. Given established patterns of value-change, this
finding suggests that a further increase in the demand for sustainable investments across developed economies is a likely scenario.